L:\secfiles\8-k\1997\release\1stqtrPR.doc
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported) April 14, 1997
----------------
GENERAL MOTORS CORPORATION
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 1-143 38-0572515
- ---------------------------- ----------------------- -------------------
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
100 Renaissance Center, Detroit, Michigan 48243-7301
3044 West Grand Boulevard, Detroit, Michigan 48202-3091
- -------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (313)-556-5000
--------------
- 1 -
ITEM 5. OTHER EVENTS
On April 14, 1997, a news release was issued on the subject of first
quarter consolidated earnings for GM. The news release did not include financial
statement footnotes and certain other financial information that will be
filed with the Securities and Exchange Commission at a later date. The GM news
release and related news releases dated April 14, 1997 for first quarter
earnings of Hughes Electronics Corporation (Hughes) and General Motors
Acceptance Corporation (GMAC), respectively, were as follows:
GM NEWS RELEASE
GM REPORTS INCOME OF $1.8 BILLION FOR THE FIRST QUARTER OF 1997
BEST PERFORMANCE FOR NORTH AMERICAN OPERATIONS IN MORE THAN A DECADE
DETROIT -- General Motors Corp. (GM) reported today that income from
continuing operations for the first quarter of 1997 totaled $1.8 billion, or
$2.30 per share of GM $1-2/3 par value common stock, compared with $800 million,
or $0.93 per share, in the first quarter of 1996. The first-quarter results in
1997 and 1996 included certain special and unusual items. (See "Special Items,"
"1996 Strike-Related Impact," and "Highlights" for additional information.)
"GM North American Operations' net income of $764 million in the first
quarter of 1997 is the best performance for any quarter in more than a
decade," GM Chairman and Chief Executive Officer John F. Smith, Jr. said.
"This is a clear indication that GM-NAO has regained its basic earning power,
continues to build financial strength and is establishing an excellent
foundation for the future.
"We have demonstrated in our first-quarter results that the trend of
improved earnings for General Motors is continuing. It's clear that we are
moving in the right direction to further strengthen the corporation's financial
performance," he said.
"As globalization becomes a business imperative, every year -- indeed,
every quarter -- brings new challenges. But GM is ready for those challenges.
Our focus on building quality products, competing globally, and hitting our
financial targets will sustain the success of this company far into the future,"
Smith said.
"The bottom-line improvements are driven by our very successful new
products and continued emphasis on running common and running lean," he
explained. "This is evident in the positive year-over-year improvements at our
North American Operations (GM-NAO) and Delphi Automotive Systems sectors."
Significant highlights of the first-quarter of 1997 from the automotive
sectors included the following:
- GM North American Operations (GM-NAO) reported net income of $764
million in the first quarter of 1997, compared with a net loss of $279
million in the first quarter of 1996.
- Delphi Automotive Systems (Delphi) reported net income of $180 million
in the first quarter of 1997, compared with net income of $79 million
in the first quarter of 1996. The 1997-first-quarter results included a
plant-closing charge of $50 million after taxes.
- GM International Operations (GMIO) reported net income of $317 million
in the first quarter of 1997, compared with net income of $432 million
in the prior-year period. The first-quarter 1997 results included a $55
million after-tax gain related to an agreement with Volkswagen A.G.
(VW).
- 2 -
Highlights of first-quarter 1997 results reported by GM's major
subsidiaries included the following:
- General Motors Acceptance Corporation (GMAC) reported net income of
$372 million for the first quarter of 1997, compared with net income of
$309 million in the first quarter of 1996.
- Hughes Electronics Corporation (Hughes) reported first-quarter 1997
earnings of $235 million, compared with earnings of $312 million in the
prior-year period. The first quarter of 1996 included the favorable
impact of a $72-million after-tax gain on the sale of a 2.5-percent
equity interest in DIRECTV(R).
(See additional information in sections detailing individual automotive
sector results, "Special Items," "1996 Strike-Related Impact" and
"Highlights.")
GM CONSOLIDATED FINANCIAL DATA (with financing & insurance operations on an
equity basis)
The corporation's pretax income from continuing operations was $2.1
billion in the first quarter of 1997, compared with $684 million in the first
quarter of 1996.
The corporation's after-tax net-profit margin -- income from continuing
operations as a percentage of net sales and revenues -- was 4.8 percent in the
first quarter of 1997, compared with 2.3 percent in the first quarter of 1996.
The corporation's cash position remained strong during the first quarter
of 1997. Cash and marketable securities totaled $14.6 billion at March 31, 1997,
compared with $7.6 billion at March 31, 1996, and $17.0 billion Dec. 31, 1996.
In the first quarter of 1997, GM used approximately $1.6 billion to acquire more
than 27 million shares of GM $1-2/3 par value common stock under the
corporation's stock-repurchase program announced in January.
Fully consolidated net sales and revenues in the first quarter of 1997
totaled $42.3 billion, compared with $39.2 billion in the same period last year
- -- a 7.9-percent increase.
Following is a summary of financial performance for GM's automotive
business sectors:
GM NORTH AMERICAN OPERATIONS (GM-NAO)
GM North American Operations' first-quarter-1997 net income of $764
million was the highest in more than 10 years. GM-NAO reported a net loss of
$279 million in the first quarter of 1996.
GM-NAO reported pretax income of $1.1 billion in the first quarter of
1997, compared with a pretax loss of $517 million in the prior-year period.
GM-NAO's net-profit margin was 3.1 percent in the first quarter of 1997,
compared with a net-loss margin of 1.3 percent in the prior-year period.
"The improved results were driven primarily by the many new models
introduced into the marketplace, which are less costly to produce than those
they replaced, by continued material-cost reductions, and production
efficiencies," Smith said.
- 3 -
While it's early in the launch cycle, sales of the Pontiac Grand Prix,
Buick Park Avenue, and the Saturn SC coupe are all gaining strong consumer
acceptance and showing major double-digit increases over the vehicles they
replaced. The Cadillac Catera is on track to exceed sales expectations, the
all-new Chevrolet Malibu and Oldsmobile Cutlass models are hitting target
markets, and the all-new trio of minivans -- the Chevy Venture, Pontiac
Transport and Oldsmobile Silhouette -- are gaining market share. As the
Corvette, Buick Century and Regal and Oldsmobile Intrigue enter the market in
larger numbers additional market-share increases are expected.
GM vehicle deliveries in the United States in the first quarter of 1997
totaled 1,123,000 units, which resulted in a 30.2-percent share of the U.S.
vehicle market, compared with 1,152,000 units and a 31.2-percent market share in
the first quarter of 1996. (See additional information in "Highlights.")
DELPHI AUTOMOTIVE SYSTEMS (DELPHI)
Delphi Automotive Systems reported net income of $180 million in the first
quarter of 1997, compared with net income of $79 million in the first quarter of
1996. The first-quarter-1997 results included a plant-closing charge of $50
million after taxes.
Delphi reported pretax income of $238 million in the first quarter of
1997, compared with pretax income of $122 million in the prior-year period.
Delphi's net-profit margin was 2.7 percent in the first quarter of 1997,
compared with a net-profit margin of 1.3 percent in the prior-year period.
Delphi's 1997 first-quarter sales to customers outside the GM-NAO vehicle
groups increased compared to the 1996 first quarter and represented
approximately 35 percent of total sales.
"Delphi is continuing its transformation into a leading global
automotive-systems supplier with an emphasis on customer satisfaction through
technology leadership, quality, cost control and responsiveness," Smith said.
"With approximately 35 percent of total sales in the first quarter of 1997
outside the GM-NAO vehicle groups, Delphi is on track to meet its goal of 50
percent non-GM-NAO sales by the end of 2002."
GM INTERNATIONAL OPERATIONS (GMIO)
GM International Operations reported net income of $317 million for the
first quarter of 1997, compared with net income of $432 million in the same
period of 1996.
GMIO reported pretax income of $476 million in the first quarter of 1997,
compared with pretax income of $577 million in first quarter of 1996.
The net-profit margin for GMIO was 3.8 percent in the first quarter of
1997, compared with 4.8 percent in the prior-year period.
GM's automotive operations in Europe reported net income of $149 million
in the first quarter of 1997, compared with net income of $285 million in the
prior-year period.
The first-quarter-1997 results included a $55-million after-tax gain
related to an agreement with VW.
- 4 -
"The lower earnings in the first quarter of 1997 were primarily due to
reduced volume and higher sales incentives across Europe under intensely
competitive market conditions, coupled with lower equity earnings, primarily
from Saab as they await the release of their new 9-5 models later in the year,"
Smith said.
For the remainder of GM International Operations, which include the Latin
American and Asia and Pacific Operations, net income totaled $168 million in the
first quarter of 1997, compared with $147 million in the prior-year period.
During the first quarter of 1997, GM and Shanghai Automotive Industry
Corp. signed joint venture contracts to manufacture 100,000 Buicks annually in
China. GM also announced plans to construct a third assembly facility in Brazil
to capitalize on the volume growth in Latin American markets.
GMIO volume totaled 788,000 unit deliveries in the first quarter of 1997
resulting in an 8.4-percent market share, compared with first-quarter-1996
deliveries of 807,000 units and a market share of 8.9 percent.
SPECIAL ITEMS
The first-quarter-1997-results were affected by special items, which
included an after-tax gain of $55 million, or $0.07 per share of GM $1-2/3 par
value common stock, that resulted from an agreement with Volkswagen settling a
civil lawsuit which GM brought against VW.
The first-quarter-1997 results were negatively impacted by a pretax
plant-closing charge of $80 million ($50 million after taxes, or $0.07 per share
of GM $1-2/3 par value common stock) related to the recent announcement that
Delphi Interior and Lighting Systems will cease production at its Trenton, N.J.,
plant during the 1998 calendar year.
The first-quarter-1996 results included a $120 million pretax gain ($72
million after taxes, or $0.07 per share of GM $1-2/3 par value common stock)
associated with the sale of a 2.5-percent equity interest in DIRECTV(R).
1996 STRIKE-RELATED IMPACT
The first-quarter-1996 results also included the $900-million after-tax
unfavorable impact ($1.20 per share of GM $1-2/3 par value common stock) related
to a 17-day strike at two GM component plants in Dayton, Ohio, that resulted in
the temporary shutdown of 26 of 29 GM North American assembly plants and certain
automotive component plants during the quarter.
Included in the above amount are the following sector-specific after-tax
approximate effects of the strike: GM-NAO, $750 million; Delphi, $120 million,
and Hughes, $30 million.
# # #
HIGHLIGHTS (ATTACHED)
- 5 -
HIGHLIGHTS - Q1 Financial Results
(Dollars in Millions Except
Per Share Amounts) Three Months Ended
March 31,
----------------------
1997 1996
---------------------------- --------- ----------
Net sales and revenues
Manufactured products $37,440 $34,658
Financial services 3,197 3,179
Other income 1,623 1,403
-------- --------
Total net sales and revenues $42,260 $39,240
-------- --------
Gross profit margin percentage(1) 17.2% 13.1%
.....................................................
Income from continuing operations
before income taxes(1) $2,129 $684
Effective income tax rate (1) 34.3% 34.4%
.....................................................
Income from continuing
operations $1,796 $800
Income from discontinued
operations - 219
-------- --------
Consolidated net income $1,796 $1,019
======== ========
Net profit margin on income
from continuing operations (1) 4.8% 2.3%
======== ========
.....................................................
Earnings Attributable to Common Stocks
$1-2/3 par value(2) $1,717 $714
Class E $ - $209
Class H $ 59 $ 76
.....................................................
Earnings Per Share Attributable to Common Stocks
$1-2/3 par value(2) $2.30 $0.94
Class E $ - $0.45
Class H $0.59 $0.78
.....................................................
Cash Dividends Per Share of Common Stocks
$1-2/3 par value $0.50 $0.40
Class E $ - $0.15
Class H $0.25 $0.24
.....................................................
Book Value Per Share of Common Stocks
March 31 Dec. 31 March 31
1997 1996 1996
-------- ------- --------
$1-2/3 par value $28.10 $27.95 $26.67
Class E $ - $ - $ 3.40
Class H $14.05 $13.97 $13.35
....................................................
See footnotes beginning on page 10.
continues
- 6 -
HIGHLIGHTS - Q1 Financial Results
(Dollars in Millions) Three Months Ended
March 31,
----------------------
1997 1996
---------------------------- --------- ----------
Major Business Sector Results
GM-NAO:
Net sales and revenues $24,859 $21,683
====== ======
Pre-tax income (loss) $1,127 $(517)
Income tax expense (benefit) 378 (222)
Equity income 15 16
------ ------
GM-NAO net income (loss) $764 $(279)
------ ------
Delphi:
Net sales and revenues $6,664 $6,189
====== ======
Pre-tax income $238 $122
Income tax expense 72 47
Equity income 14 4
------ ------
Delphi net income $180 $79
------ ------
GMIO:
Net sales and revenues $8,283 $8,997
====== ======
Pre-tax income $476 $577
Income tax expense 164 170
Equity income 5 25
------ ------
GMIO net income (3) $317 $432
------ ------
GMAC net income $372 $309
Hughes earnings 235 312
Other (4) (72) (53)
------ ------
Income from continuing
operations 1,796 800
Income from discontinued
operations - 219
------ ------
Consolidated net income $1,796 $1,019
====== ======
.....................................................
See footnotes beginning on page 10.
continues
- 7 -
HIGHLIGHTS - Q1 Special and Unusual Items
(Dollars in Millions Except
Per Share Amounts)
Three Months Ended
March 31,
----------------------
1997 1996
--------- ----------
Special and Unusual Items Analysis
Income from continuing
operations $1,796 $800
------ ------
Special and unusual items
VW settlement (5) 55 -
Plant closing expense (6) (50) -
Work stoppages (7) - (900)
Sale of 2.5% of DIRECTV (8) - 72
------ ------
Total special and
unusual items 5 (828)
------ ------
Income from continuing operations
-excluding special and
unusual items $1,791 $1,628
====== ======
.....................................................
$1-2/3 EPS Impact of Special and Unusual Items
Attributable to continuing
operations $2.30 $0.93
----- -----
Special and unusual items
VW settlement (5) 0.07 -
Plant closing expense (6) (0.07) -
Work stoppages (7) - (1.20)
Sale of 2.5% of DIRECTV (8) - 0.07
----- ------
Total special and
unusual items - (1.13)
----- ------
Attributable to continuing
operations - excluding
special and unusual items $2.30 $2.06
===== ======
.....................................................
See footnotes beginning on page 10.
continues
- 8 -
<PAGE>
HIGHLIGHTS - Q1 Operating Information
Three Months Ended
March 31,
----------------------
1997 1996
--------- ----------
Worldwide Wholesale Sales (Units in 000s)
United States: Cars 698 591
Trucks 554 461
------- -------
Total United States 1,252 1,052
Canada and Mexico 150 114
------- -------
Total North America 1,402 1,166
International 783 792
------- -------
Total Worldwide 2,185 1,958
======= =======
....................................................
Vehicle Unit Deliveries (Units in 000s)
United States
Chevrolet - Cars 251 263
- Trucks 358 372
Pontiac 145 127
GMC 109 109
Buick 87 96
Oldsmobile 65 74
Saturn 60 64
Cadillac 42 41
Other 6 6
----- -----
Total United States 1,123 1,152
Canada and Mexico 121 103
------ ------
Total North America 1,244 1,255
------ ------
International
Europe 466 489
Latin America, Africa, and the
Middle East 162 160
Asia and Pacific 160 158
------ ------
Total International 788 807
------ ------
Total Worldwide 2,032 2,062
====== ======
....................................................
Market Share
United States
Cars 31.5% 32.2%
Trucks 28.6% 29.9%
Total 30.2% 31.2%
Western Europe 11.5% 12.0%
Latin America 16.0% 17.2%
Asia and Pacific 4.2% 4.4%
Total Worldwide 15.1% 15.8%
....................................................
U.S. Retail/Fleet Mix
% Fleet Sales - Cars 26.5% 25.0%
% Fleet Sales - Trucks 13.6% 11.3%
Total Vehicles 20.9% 19.2%
....................................................
Days Supply of Inventory -- U.S.
Gross Landed Stock
Cars 81 84
Trucks 91 81
....................................................
Capacity Utilization %
U.S. and Canada (2-shift rated) 95.3% 69.1%
....................................................
Retail Incentives (9)($ per unit)
GM-NAO $860 $598
GM Europe $622 $443
....................................................
See footnotes beginning on page 10.
continues
- 9 -
HIGHLIGHTS - Q1 Operating Information
(Dollars in Millions Except
Per Share Amounts)
Three Months Ended
March 31,
----------------------
1997 1996
--------- ----------
Depreciation and amortization (1)
Depreciation $1,051 $989
Amortization of special tools 787 761
Amortization of intangible assets 41 38
----- -----
$1,879 $1,788
===== =====
....................................................
Worldwide Employment at March 31 (in 000s)
GM-NAO 242 252
Delphi 178 178
GMIO 112 109
GMAC 18 17
Hughes 88 83
Other 10 11
--- ---
Employees associated with
continuing operations 648 650
--- ---
....................................................
Worldwide Payrolls-Continuing
Operations $7,732 $7,540
....................................................
(1) Calculated with financing and insurance operations on an
equity basis.
(2) $1-2/3 par value includes:
Three Months Ended
March 31,
-------------------
1997 1996
----- -----
Earnings attributable to:
Continuing operations $1,717 $704
Discontinued operations - 10
------- -------
Net earnings $1,717 $714
======= =======
Earnings per share attributable to:
Continuing operations $2.30 $0.93
Discontinued operations - 0.01
------ -------
Net earnings per share $2.30 $0.94
====== =======
(3) GMIO Includes: Three Months Ended
March 31,
------------------
1997 1996
---- ----
GM Europe $149 $285
Other GMIO $168 $147
(4) Includes Allison Transmission Division, GM Locomotive Group, and
purchase accounting adjustments, as well as certain tax and foreign
exchange items not allocated to any one business sector.
(5) The first-quarter 1997 results included a gain of $55 million after
taxes, or $0.07 per share of GM $1-2/3 par value common stock, that
resulted from an agreement with Volkswagen A.G. (VW) settling a civil
lawsuit which GM brought against VW.
(6) The first-quarter 1997 results were negatively impacted by a plant
closing charge of $50 million after taxes, or $0.07 per share of GM
$1-2/3 par value common stock, related to the recent announcement that
Delphi Interior and Lighting Systems will cease production at its
Trenton, N.J., plant during the 1998 calendar year.
- 10 -
HIGHLIGHTS - Q1 Operating Information - Concluded
(7) Strike-related work stoppages in the first quarter of 1996 had an
unfavorable impact of $900 million after taxes, or $1.20 per share of
GM $1-2/3 par value common stock.
(8) The first-quarter 1996 results also included a gain of $72 million
after taxes, or $0.07 per share of GM $1-2/3 par value common stock
associated with the sale of a 2.5 percent equity interest in DIRECTV.
(9) Amounts reported for 1996 have been restated to reflect the methodology
used to calculate Retail Incentives for the 1997 period.
- 11 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
March 31,
1997 1996
(Dollars in Millions
Except Per Share Amounts)
Net sales and revenues
Manufactured products $37,440 $34,658
Financial services 3,197 3,179
Other income 1,623 1,403
------- -------
Total net sales and revenues 42,260 39,240
------ ------
Costs and expenses
Cost of sales and other operating charges,
exclusive of items listed below 31,030 30,130
Selling, general, and administrative expenses 3,591 3,070
Depreciation and amortization expenses 3,065 2,972
Interest expense 1,461 1,421
Plant closing expense 80 -
Other deductions 248 414
------- -------
Total costs and expenses 39,475 38,007
------ ------
Income from continuing operations before income taxes 2,785 1,233
Income taxes 989 433
------ -------
Income from continuing operations 1,796 800
Income from discontinued operations - 219
--------- ------
Net income 1,796 1,019
Dividends on preference stocks 20 20
------ ------
Earnings on common stocks $1,776 $999
===== ===
Earnings attributable to common stocks
$1-2/3 par value from continuing operations $1,717 $704
Income from discontinued operations - 10
------- ----
Net earnings attributable to $1-2/3 par value $1,717 $714
Income from discontinued operations attributable
to Class E $ - $209
===== ===
Net earnings attributable to Class H $59 $76
== ==
Average number of shares of common stocks outstanding (in millions)
$1-2/3 par value 747 755
Class E - 463
Class H 100 97
Earnings per share attributable to common stocks
$1-2/3 par value from continuing operations $2.30 $0.93
Income from discontinued operations - 0.01
------ ----
Net earnings attributable to $1-2/3 par value $2.30 $0.94
==== ====
Income from discontinued operations attributable
to Class E $ - $0.45
===== ====
Net earnings attributable to Class H $0.59 $0.78
==== ====
Cash dividends per share of common stocks
$1-2/3 par value $0.50 $0.40
Class E $ - $0.15
Class H $0.25 $0.24
- 12 -
<PAGE>
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, March 31,
1997 Dec. 31, 1996
(Unaudited) 1996 (Unaudited)
(Dollars in Millions)
Assets
Cash and cash equivalents $10,061 $14,063 $7,901
Other marketable securities 10,168 8,199 5,419
------ ------- -------
Total cash and marketable securities 20,229 22,262 13,320
Finance receivables - net 62,202 57,550 59,092
Accounts and notes receivable
(less allowances) 6,976 6,557 6,663
Inventories (less allowances) 12,851 11,898 12,376
Net assets of discontinued operations - - 5,245
Contracts in process (less advances and
progress payments) 2,661 2,507 2,709
Deferred income taxes 20,138 19,510 20,164
Equipment on operating leases (less accumulated
depreciation) 30,127 30,112 27,771
Property
Real estate, plants, and equipment 69,191 69,770 68,097
Less accumulated depreciation (41,037) (41,298) (41,252)
------ ------ ------
Net real estate, plants, and equipment 28,154 28,472 26,845
Special tools - net 8,850 9,032 8,294
------- ------- -------
Total property 37,004 37,504 35,139
Intangible assets - net 12,737 12,691 10,295
Other assets 21,134 21,551 19,056
-------- -------- --------
Total assets $226,059 $222,142 $211,830
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable (principally trade) $14,014 $14,221 $11,515
Notes and loans payable 88,111 85,300 80,299
Deferred income taxes 4,119 3,207 3,117
Postretirement benefits other than pensions 43,607 43,190 42,015
Pensions 7,814 7,599 6,203
Other liabilities and deferred credits 45,589 45,207 44,659
-------- -------- --------
Total liabilities 203,254 198,724 187,808
Stockholders' equity
Preference stocks 1 1 1
Common stocks
$1-2/3 par value (issued, 729,805,298; 756,619,625;
and 756,621,525 shares) 1,216 1,261 1,261
Class E (issued, 487,568,555 shares at
March 31, 1996) - - 49
Class H (issued, 101,108,669; 100,075,000;
and 98,154,411 shares) 10 10 10
Capital surplus (principally additional
paid-in capital) 17,689 19,189 19,114
Retained earnings 7,511 6,137 7,782
------- ------- -------
Subtotal 26,427 26,598 28,217
Minimum pension liability adjustment (3,490) (3,490) (4,742)
Accumulated foreign currency translation adjustments (475) (113)
118
Net unrealized gains on investments in
certain debt and equity securities 343 423 429
------- -------- --------
Total stockholders' equity 22,805 23,418 24,022
------ ------ ------
Total liabilities and stockholders'
equity $226,059 $222,142 $211,830
======= ======= =======
- 13 -
<PAGE>
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31,
1997 1996
(Dollars in Millions)
Net cash provided by operating activities $4,097 $941
----- ---
Cash flows from investing activities
Expenditures for property (1,807) (2,098)
Investments in other marketable securities
- acquisitions (11,603) (5,107)
Investments in other marketable securities
- liquidations 10,107 5,220
Finance receivables - acquisitions (37,475) (39,145)
Finance receivables - liquidations 26,848 33,812
Proceeds from sales of finance receivables 5,538 5,876
Operating leases - acquisitions (5,527) (4,201)
Operating leases - liquidations 4,124 2,744
Other 512 359
------ ------
Net cash used in investing activities (9,283) (2,540)
----- -----
Cash flows from financing activities
Net increase (decrease) loans payable 2,484 (2,343)
Increase in long-term debt 4,207 4,307
Decrease in long-term debt (3,329) (2,823)
Proceeds from issuing common stocks 206 190
Repurchases of common stocks (1,761) -
Cash dividends paid to stockholders (422) (421)
Proceeds from the sale of minority interest in DIRECTV - 138
Net cash provided by (used in) financing activities 1,385 (952)
----- ------
Effect of exchange rate changes on cash and
cash equivalents (201) (73)
------- -------
Net cash used in continuing operations (4,002) (2,624)
Net cash provided by discontinued operations - 29
--------- -------
Net decrease in cash and cash equivalents (4,002) (2,595)
Cash and cash equivalents at beginning of the period 14,063 10,496
------ ------
Cash and cash equivalents at end of the period $10,061 $7,901
====== =====
- 14 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
To facilitate analysis, the following financial data presents the financial
statements for the Corporation's manufacturing, wholesale marketing, defense,
and electronics operations with the financing and insurance operations
(primarily GMAC) reflected on an equity basis. This is the same basis and format
used in years prior to the Corporation's adoption of SFAS No. 94, Consolidation
of All Majority-Owned Subsidiaries.
Consolidated Statements of Income With Financing and Insurance Operations on an
Equity Basis (Unaudited)
Three Months Ended
March 31,
1997 1996
(Dollars in Millions)
Net sales and revenues $37,457 $34,672
------ ------
Costs and expenses
Cost of sales and other operating charges, exclusive
of items listed below 31,024 30,123
Selling, general, and administrative expe 2,884 2,448
Depreciation and amortization expenses 1,879 1,788
Plant closing expense 80 -
-------- ----------
Total costs and expenses 35,867 34,359
------ ------
Operating income 1,590 313
Other income less income deductions 758 567
Interest expense 219 196
----- ------
Income from continuing operations before income 2,129 684
Income taxes 730 235
------ ------
Income from continuing operations before earnings of
nonconsolidated affiliates 1,399 449
Earnings of nonconsolidated affiliates 397 351
------ ------
Income from continuing operations 1,796 800
Income from discontinued operations - 219
-------- ------
Net income $1,796 $1,019
===== =====
Net profit margin (1) 4.8% 2.3%
(1) Net profit margin represents income from continuing operations as a
percentage of net sales and revenues.
- 15 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets With Financing and Insurance Operations
on an Equity Basis (Unaudited)
March 31, Dec. 31, March 31,
1997 1996 1996
(Dollars in Millions)
ASSETS
Cash and cash equivalents $9,395 $13,320 $6,539
Other marketable securities 5,233 3,642 1,100
------- ------- -----
Total cash and marketable securities 14,628 16,962 7,639
Accounts and notes receivable (less allowances)
Trade 5,507 4,909 5,290
Nonconsolidated affiliates 1,844 927 2,077
Inventories (less allowances) 12,851 11,898 12,376
Net assets of discontinued operations - - 5,245
Contracts in process - net 2,661 2,507 2,709
Net equipment on operating leases 4,187 3,918 3,909
Deferred income taxes and other 3,483 3,141 5,481
------- ------- ------
Total current assets 45,161 44,262 44,726
Equity in net assets of nonconsolidated
affiliates 9,696 9,855 9,669
Deferred income taxes 20,354 20,075 17,737
Other investments and miscellaneous assets 11,594 11,391 11,844
Property - net 36,634 37,156 35,005
Intangible assets - net 12,573 12,523 10,129
-------- -------- --------
Total assets $136,012 $135,262 $129,110
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $11,379 $11,527 $9,123
Loans payable 1,306 1,214 1,779
Accrued liabilities and customer deposits 30,168 29,822 27,569
------ ------ ------
Total current liabilities 42,853 42,563 38,471
Long-term debt 5,316 5,192 4,510
Capitalized leases 191 198 163
Postretirement benefits other than
pensions 40,988 40,578 39,410
Pensions 6,183 5,966 5,102
Other liabilities and deferred income
taxes 15,956 15,742 15,829
Deferred credits 1,720 1,605 1,603
--------- --------- ---------
Total liabilities 113,207 111,844 105,088
------- ------- -------
Stockholders' equity 22,805 23,418 24,022
-------- -------- --------
Total liabilities and stockholders'
equity $136,012 $135,262 $129,110
============ ======= =======
- 16 -
GENERAL MOTORS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows With Financing and Insurance
Operations on an Equity Basis (Unaudited)
Three Months Ended
March 31,
1997 1996
(Dollars in Millions)
Net cash provided by (used in) operating activities $1,808 $(998)
----- ----
Cash flows from investing activities
Expenditures for property (1,724) (2,054)
Investments in other marketable securities
- acquisitions (6,199) (2,219)
Investments in other marketable securities
- liquidations 4,608 2,313
Operating leases - acquisitions (1,352) (1,002)
Operating leases - liquidations 1,001 1,500
Other (104) 106
------ ------
Net cash used in investing activities (3,770) (1,356)
----- ------
Cash flows from financing activities
Net increase (decrease) in loans payable 93 (407)
Increase in long-term debt 154 962
Decrease in long-term debt (30) (570)
Proceeds from issuing common stocks 206 190
Repurchases of common stocks (1,761) -
Cash dividends paid to stockholders (422) (421)
Proceeds from sale of minority interest in DIRECTV - 138
-------- -----
Net cash used in financing activities (1,760) (108)
----- ----
Effect of exchange rate changes on cash and
cash equivalents (203) (75)
------ -------
Net cash used in continuing operations (3,925) (2,537)
Net cash provided by discontinued operations - 29
--------- -------
Net decrease in cash and cash equivalents (3,925) (2,508)
Cash and cash equivalents at beginning of the period 13,320 9,047
------ ------
Cash and cash equivalents at end of the period $9,395 $6,539
===== =====
- 17 -
HUGHES ELECTRONICS CORPORATION
NEWS RELEASE
Los Angeles, April 14, 1997 - Hughes Electronics Corporation (Hughes)
today reported first quarter earnings, before the effects of purchase accounting
adjustments related to General Motors' (GM) acquisition of Hughes Aircraft
Company, of $235.2 million, or $0.59 per share of GM Class H common stock.
Revenues for the period were $4,152.7 million, an 11.1% increase from the
$3,736.7 million reported in the first quarter of 1996.
Excluding the 1996 first quarter $71.6 million after-tax gain ($0.18 per
share) from the sale of a 2.5% equity interest in DIRECTV to AT&T, earnings for
the first quarter of 1997 decreased 2.0% from the $240.1 million and earnings
per share decreased $0.01 per share from the $0.60 per share in the year earlier
period. This reduction included a change in the amortization period for certain
deferred subscriber acquisition costs incurred by DIRECTV, which decreased
earnings and earnings per share for the quarter by $23.3 million and $0.06,
respectively.
Operating profit (excluding GM purchase accounting adjustments) was $324.8
million for the quarter, a 15.7% decrease from the operating profit of $385.2
million reported during the comparable period in 1996. The operating profit
margin on the same basis was 7.9% for the quarter compared with 10.7% in the
first quarter of 1996. Operating profit was reduced by $35.8 million as a result
of the change in the amortization period for certain DIRECTV subscriber
acquisition costs.
C. Michael Armstrong, Hughes Chairman and Chief Executive Officer, said
that each of Hughes' three business segments contributed to the first quarter
sales growth. "The Telecommunications and Space segment led the Company's sales
increase due to continued DIRECTV subscriber growth and increased sales of
commercial and government satellites. The Automotive Electronics segment sales
growth was driven by increased production volumes while the Aerospace and
Defense Systems segment sales increase was primarily due to build-up of newer
programs, particularly in information systems and services."
Mr. Armstrong said that the first quarter earnings decline, excluding last
year's $71.6 million after-tax gain related to DIRECTV, was principally due to
lower Galaxy satellite transponder sales, increased expenses related to the
change in the amortization period for certain subscriber acquisition costs
incurred by DIRECTV, and lower margins in Automotive Electronics primarily due
to price reductions. These factors were offset in part by the favorable impact
of a lower effective tax rate in the quarter.
On January 16, 1997, GM and Hughes announced a series of transactions
designed to address strategic challenges and unlock shareholder value in the
three Hughes business segments. The transactions include the tax-free spin-off
of the Hughes defense business to holders of GM's $1-2/3 par value and Class H
common stock, followed by the tax-free merger of that business with Raytheon
Company. At the same time, Delco Electronics will be transferred from Hughes to
GM's Delphi Automotive Systems unit. Finally, GM's Class H common stock will be
recapitalized into a tracking stock linked to the telecommunications and space
business of Hughes. The transactions are expected to be submitted to
stockholders for approval in late 1997.
- 18 -
<PAGE>
Segment Financial Review: First Quarter
TELECOMMUNICATIONS AND SPACE
Revenues for the quarter were $1,023.4 million, an increase of 9.3% over
revenues of $936.4 million reported in the prior year's first quarter. Excluding
the $120.3 million pre-tax gain recognized from the sale of 2.5% of DIRECTV to
AT&T in 1996, revenues increased 25.4%. This growth was primarily due to
continued expansion of the DIRECTV subscriber base in the United States and
Latin and South America, and increased sales of commercial and government
satellites which more than offset the impact from lower Galaxy transponder
sales. DIRECTV subscribers at March 1997 month-end totaled 2,470,000 in the
United States and 105,000 in Latin and South America.
Operating profit in the first quarter was $7.2 million compared with $74.5
million reported in the same period in 1996. First quarter operating profit
margin declined to 0.7% in 1997 from 9.1% in 1996. These reductions were largely
the result of lower Galaxy transponder sales, start-up operating losses from the
Company's Latin and South American DIRECTV subsidiary, Galaxy Latin America, and
increased expenses resulting from the change in the amortization period for
DIRECTV subscriber acquisition costs related to a consumer rebate and
manufacturers' incentive program. Based on recent guidance from the staff of the
Securities and Exchange Commission, the period over which such costs are
amortized has been reduced from three years to one year. The effect of this
change was to reduce operating profit and operating profit margin for the
segment by $35.8 million and 3.5 points, respectively.
AUTOMOTIVE ELECTRONICS
Revenues for the quarter increased 13.8% to $1,447.0 million from revenues
of $1,271.8 million for the same period in 1996. The growth was principally due
to a 20.5% increase in GM vehicles produced in the United States and Canada
(excluding joint ventures) and a 12.2% increase in international and non-GM
sales (from $245 million to $275 million) partially offset by a 5.9% decline in
Delco-supplied electronic content (from $929 to $874 per GM vehicle produced in
the United States and Canada, excluding joint ventures). Last year's first
quarter performance was negatively impacted by the 17-day strike at two GM
component plants in Dayton, Ohio that resulted in the temporary shutdown of 26
of 29 GM North American assembly plants.
Operating profit decreased 8.6% in the first quarter to $145.6 million
from $159.3 million in the comparable period in 1996. The decline was primarily
due to price reductions resulting from competitive pricing in connection with
GM's global sourcing initiative and the impact from continued international
expansion which more than offset the increased production volume benefits. The
1996 first quarter results included an operating loss of approximately $50
million related to the work stoppage described above. First quarter operating
profit margin declined to 10.2% from 12.6% in 1996.
AEROSPACE AND DEFENSE SYSTEMS
First quarter 1997 revenues were $1,646.6 million, an 8.9% increase over
revenues of $1,512.4 million reported last year. The growth was principally due
to additional revenues resulting from the build-up of newer programs,
particularly information systems and services programs such as Desktop V, Wide
Area Augmentation System, and Hughes Air Warfare Center.
Primarily due to these revenue increases, operating profit for the period
increased 9.8% to $173.4 million compared with $157.9 million for the first
quarter of 1996. The 1997 first quarter operating profit margin remained
unchanged at 10.5%, as compared to 1996.
- 19 -
CONSOLIDATED STATEMENT OF INCOME AND
AVAILABLE SEPARATE CONSOLIDATED NET INCOME
(Dollars in Millions Except Per Share Amounts)
Three Months
Ended March 31,
1997 1996
Revenues
Net sales
Outside customers $2,765.7 $2,438.9
General Motors and affiliates 1,362.5 1,174.7
Other income - net 24.5 123.1
- ------------------ ---- -----
Total Revenues 4,152.7 3,736.7
- -------------- ------- -------
Costs and Expenses
Cost of sales and other operating charges,
exclusive of items listed below 3,216.8 2,796.5
Selling, general, and administrative expenses 440.5 300.3
Depreciation and amortization 146.1 131.6
Amortization of GM purchase accounting adjustments
related to Hughes Aircraft Company 30.6 30.6
Interest expense - net 3.9 5.2
- ---------------------- --- ---
Total Costs and Expenses 3,837.9 3,264.2
- ------------------------ ------- -------
Income before Income Taxes 314.8 472.5
Income taxes 110.2 191.4
- ------------ ----- -----
Net Income 204.6 281.1
Adjustments to exclude the effect of GM purchase accounting
adjustments related to Hughes Aircraft Company 30.6 30.6
---------------------------------------------- ---- ----
Earnings Used for Computation of Available
Separate Consolidated Net Income $235.2 $311.7
================================ ====== ======
Available Separate Consolidated Net Income $59.1 $76.0
========================================== ===== =====
Net Earnings Attributable to General Motors
Class H Common Stock on a Per Share Basis $0.59 $0.78
========================================= ===== =====
- 20 -
CONSOLIDATED BALANCE SHEET
(Dollars in Millions)
March 31, December 31,
ASSETS 1997 1996
- ------ -------- ------------
Current Assets
Cash and cash equivalents $893.0 $1,161.3
Accounts and notes receivable
Trade receivables 1,291.9 1,200.6
General Motors and affiliates 116.8 113.4
Contracts in process 2,661.0 2,507.1
Inventories 1,612.3 1,528.5
Prepaid expenses, including deferred income taxes 737.6 568.1
- ------------------------------------------------- ----- -----
Total Current Assets 7,312.6 7,079.0
Property - Net 2,879.4 2,886.6
Telecommunications and Other Equipment - Net 1,168.4 1,133.5
Intangible Assets - Net 3,522.7 3,466.0
Investments and Other Assets 1,858.7 1,915.0
- ---------------------------- ------- -------
Total Assets $16,741.8 $16,480.1
============ ========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Accounts payable
Outside $1,008.9 $896.4
General Motors and affiliates 22.4 27.5
Advances on contracts 850.3 868.9
Notes and loans payable 634.9 248.1
Income taxes payable 189.2 132.9
Accrued liabilities 1,641.8 2,025.8
- ------------------- ------- -------
Total Current Liabilities 4,347.5 4,199.6
Long-Term Debt and Capitalized Leases 31.3 34.5
Postretirement Benefits Other Than Pensions 1,668.4 1,658.9
Other Liabilities and Deferred Credits 1,407.5 1,407.2
Total Stockholder's Equity 9,287.1 9,179.9
- -------------------------- ------- -------
Total Liabilities and Stockholder's Equity $16,741.8 $16,480.1
Holders of GM Class H common stock have no direct rights in the equity or assets
of Hughes, but rather have rights in the equity and assets of General Motors
(which includes 100% of the stock of Hughes).
- 21 -
PRO FORMA SELECTED SEGMENT DATA*
(Dollars in Millions)
Three Months
Ended March 31,
1997 1996
TELECOMMUNICATIONS AND SPACE
Revenues
Amount $1,023.4 $936.4
As a percentage of Hughes Revenues 24.6% 25.1%
Net Sales $1,018.8 $821.0
Operating Profit (1) $7.2 $74.5
Operating Profit Margin (2) 0.7% 9.1%
Depreciation and Amortization (3) $50.3 $46.2
Capital Expenditures (4) $94.0 $70.3
- ------------------------ ----- -----
AUTOMOTIVE ELECTRONICS
Revenues
Amount $1,447.0 $1,271.8
As a percentage of Hughes Revenues 34.8% 34.0%
Net Sales $1,433.9 $1,260.2
Operating Profit (1) $145.6 $159.3
Operating Profit Margin (2) 10.2% 12.6%
Depreciation and Amortization $56.2 $48.8
Capital Expenditures $35.9 $50.3
- -------------------- ----- -----
AEROSPACE AND DEFENSE SYSTEMS
Revenues
Amount $1,646.6 $1,512.4
As a percentage of Hughes Revenues 39.7% 40.5%
Net Sales $1,644.8 $1,502.2
Operating Profit (1) $173.4 $157.9
Operating Profit Margin (2) 10.5% 10.5%
Depreciation and Amortization (3) $37.0 $32.7
Capital Expenditures $30.3 $28.5
- -------------------- ------ -----
CORPORATE AND OTHER
Operating Loss (1) $(1.4) $(6.5)
- ------------------ ------ ------
* The Consolidated Financial Statements reflect the application of purchase
accounting adjustments related to GM's acquisition of Hughes Aircraft Company.
However, as provided in the General Motors Certificate of Incorporation, the
earnings attributable to GM Class H common stock for purposes of determining the
amount available for the payment of dividends on GM Class H common stock
specifically excludes such adjustments. In order to provide additional
analytical data, the above unaudited pro forma selected segment data, which
excludes the purchase accounting adjustments related to GM's acquisition of
Hughes Aircraft Company, is presented.
(1) Net Sales less Total Costs and Expenses other than Interest Expense. (2)
Operating Profit as a percentage of Net Sales. (3) Excludes amortization arising
from purchase accounting adjustments related to GM's acquisition of Hughes
Aircraft Company amounting to $5.3 million for the Telecommunications and Space
segment and $25.2 million for the Aerospace and Defense Systems segment in 1997
and 1996. (4) Includes expenditures related to telecommunications and other
equipment amounting to $57.6 million and $16.0 million, in 1997 and 1996,
respectively.
- 22 -
GENERAL MOTORS ACCEPTANCE CORPORATION
NEWS RELEASE
GMAC ANNOUNCES STRONG FIRST-QUARTER EARNINGS
DETROIT -- GMAC (General Motors Acceptance Corporation) reported first-quarter
1997 consolidated net income of $372 million, up 20% from $309 million earned in
the first quarter of 1996, GMAC President John R. Rines announced today.
Excluding the cumulative effect of a favorable accounting change made in 1991,
these results were the highest first-quarter earnings in 10 years.
In the quarter, net income from financing operations, including the GMAC
Mortgage Group, totaled $294 million, up 8% from $272 million earned in the
first quarter of 1996. Results for the first three months of 1997 benefited from
higher earnings from the mortgage operations and increased net interest margins
in the United States and Canada.
Motors Insurance Corporation, GMAC's insurance subsidiary, generated net
income of $78 million in the first quarter, compared with $37 million earned
last year. MIC's earnings increase is principally due to higher capital gains.
* * *
- 23 -
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL MOTORS CORPORATION
--------------------------
(Registrant)
Date April 14, 1997
-----------------
By
s/Peter R. Bible
-------------------------------
(Peter R. Bible,
Chief Accounting Officer)
- 24 -
